Lattice scheme deficit down 31% under FRS17

UK – The Lattice Group Pension Scheme’s deficit under the FRS17 accounting measure has fallen by 31% in the last year.

Energy group National Grid Transco said the scheme’s deficit net of deferred tax as at March 31 2004 was 1.56 billion pounds (2.32 billion euros), down from 2.26 billion a year before.

National Grid Transco said the actuarial valuation of the scheme under the SSAP24 accounting measure has been completed as at March 31 2003.

It said: “This valuation resulted in an actuarial deficit of 879 million pounds before tax (615 million pounds after tax).” And it added that annual assessments of the scheme would be carried out in the future.

The funding of the deficit has been deferred until after the 2007 actuarial valuation. The company's cash contributions for the ongoing cost of the scheme - which covers current and former UK gas industry employees - are being made at a rate of around 22% of pensionable payroll.

The new actuarial valuation resulted in a SSAP24 charge of 144 million pounds, up from 70 million pounds last year.

Ratings agency Moody’s Investors Service said it “positively acknowledged” the company’s lower debt and improved pension deficit”. Its rating of Baa1 was unchanged.

For the year ended March 31 National Grid Transco made an underlying pre-tax profit of 1.4 billion pounds, up 14%. Net debt fell to 12.6 billion pounds.